EU environmental challenges and their impact on
Application and effect of energy taxes in Poland
Final meeting of the CAPACT project including seminar on
Appropriate pricing reforms regarding coal, heat, and electricity to
facilitate investments for deployment of Coal Clean Technologies
(CCTs), 4-6 July 2007, Almaty, Kazakhstan
Andrzej Jagusiewicz
Manager-Cleaner Air for Europe- KlinEr
www.stop-cafe.eu
1
Legal requirements of the EU
TSAP/CAFE
CLIMATE PROTECTION
• Political 3x20 %
• Existing regulations for •
classic pollutants
•
• New legal
•
requirements (PM2,5)
•
• Integration of existing
and new regulations •
(better regulation) into
the CAFE directive
•
Climate Strategy
The Kyoto Protocol
ETS
NAP I and NAP II
Green energy and Red
energy
Biofuels
EU TSAP-CAFE
3rd generation of air
quality management
Limit value
PM 2,5
Exposure reduction
-20%
2020/2010
Emission ceilings for
PM precursors
(NECD revision)
Necessary reduction of SO2
from LCP sector according to AT and TSAP
1 000 000
908 000
900 000
800 000
700 000
600 000
500 000
400 000
454 000
358 000
426 000
300 000
300 000
200 000
100 000
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
0
PM emission trend in 2000-2004.
TSP, PM10, PM2.5 [Mg]
600000
500000
400000
300000
200000
100000
0
2000
2001
2002
TSP
PM10
2003
PM2.5
2004
Classification of zones for PM10
2004
2005
GHG emissions in Poland, except sector 5 (carbon sink)
600 000
Odpady
cel Kioto (6% redukcja)
500 000
400 000
Użytkowanie
rozpuszczalników i
innych produktów
300 000
200 000
Procesy
przemysłowe
100 000
Energia
2012
2011
2010
2009
2008
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
0
1988
Gg ekwiwalent
2 CO
Rolnictwo
Energy consumption in Poland increases faster than new
generation capacities
Total installedcapacity(MW
)
G
rosenergyconsumption(G
W
h)
160000
CAGR = 1,6%
151631
155000
150000
145000
145183
145615
142128
154159
34000
32000
CAGR = 0,6%
30732
30559
30672
30815
1999
2000
2001
2002
31407
31724
2003
2004
30000
144126
28000
140000
26000
135000
24000
130000
22000
125000
20000
120000
1999
2000
2001
2002
2003
2004
• Energy consumption is tightly connected to the economic growth and during 5 recent years has approximately inreased by 1.6% per year
• Despite the lack of substantial investements in new capacities, which increased only of 0.6% yearly during 1999-2004, the increase of energy
consumption was met by an improvement of capacity usage rate
• However, further improvement of capacity rate is limited by the age and quality of Polish generation assets:
• Over 60% of installed capacity is older than 25 years
• 40% of power boilers do not meet SO2 emission limits, which will come into effect in the coming years
• Over 80% of installed capacity does not meet NOx limits, which will come into effect since 2016
8
Source : BOT Group
To meet increasing electricity demand, new generation
capacities must be built
E
stim
atedd
em
an
do
ng
en
eratio
ncap
acitiesin 2004-2034*, M
W
E
stim
atedg
ro
ssen
erg
yco
n
su
m
p
tio
nin2004-2034*, G
W
h
55000
51170
280000
250000
50000
260000
45105
240000
45000
230000
215000
220000
39814
40000
200000
180000
160000
35000
154159
31724
30000
140000
120000
25000
2004
100000
2004
2014
2024
2014
2024
2034
2034
• Considering average growth of electricity consumption at the rate of 2% yearly, Poland will need approximately 250 TWh of electricity in 2034 ,
which is more than 60% now
• To meet increasing electricity demand and taking into consideration decommissioning of old units, at least 30 GW of new generation facilities
will be required of which 10 GW during the next 10 years.
9
Source: BOT Group
Current investment flagship
Bełchatów Power Plant – (unit 13)
Installed capacity
Net efficiency
Fuel consumption
Emission
NOx
SO2
Ash
EPC Contactor
COD
858 MW
41.7%
6.5 MM t/year
< 200 mg/Nm3
< 200 mg/Nm3
< 30 mg/Nm3
ALSTOM
October 2009
10
Source: BOT Group
Electricity generation from renewables, except hydropower in
UE-25 (1990-2005)
Źródło; Mapa drogowa na rzecz energii odnawialnej. Energie odnawialne w XXI wieku: budowa bardziej zrównoważonej
przyszłości. Komunikat Komisji do Rady Europejskiej i Parlamentu Europejskiego. Bruksela, 10 stycznia 2007 r., KOM(2006) 848
wersja ostateczna
EU primary energy demand according to its carrier (1990-2030)
Źródło; Mapa drogowa na rzecz energii odnawialnej. Energie odnawialne w XXI wieku: budowa bardziej zrównoważonej
przyszłości. Komunikat Komisji do Rady Europejskiej i Parlamentu Europejskiego. Bruksela, 10 stycznia 2007 r., KOM(2006) 848
wersja ostateczna
Structure of energy carriers in electricity generation in Poland
in 2005 r.
Źródło; Opracowanie własne na podstawie danych URE, ARE, OSP
Introduction to the Polish energy market
Transmission grid in Poland
Electricity 2006
Number of energy end-users
15.7 million
Generation capacties
34 864 MW
Gross electric energy
production
161,9 TWh
Total energy consumption
Load:
 max (24/01/2006)
 min (21/05/2006)
150 TWh
24 640 MW
15 086 MW
Source: PSE-Operator, ERA, TOE
Formal-legal conditions…
Trading companies in Poland
 concessions - 308 (5.05.2007)
 26 most active trading companies are in TOE
(Association of Energy Trading)
 total sales of the most active trading companies:
about 80 TWh (2006)>almost 50 % of gross
electricity production
 the number of TPA customers:
over 40
Promoting renewables....
Mechanism of “Green certificates of
origin-GCO”–split of energy market and
green energy property since 2006
Energy
generation
with
renewables
Certificate of
origin (GCO)
Electrical
energy
Subject to
be traded
GCO property
market
Electricity market
Market
segment
Promoting renewables....
Energy type, its quantity and number of certificates of
origin (CO) attributed in 2005-2006
Type of energy
Biogas
Generation period
1.01.2005 − 31.12.2005
Generation period
1.01.2006 − 31.12.2006
Energy
quantity
[MWh]
Energy
quantity
[MWh]
Nr of CO
29 712,5920
56
125 895,6760
8
Wind
40 795,6060
57
Hydro
316 481,6808
629
Co-combustion
281 520,8770
14
794 406,4320
764
Biomass
Total
Nr of CO
89 031,927
254
455 895,111
47
196 349,080
261
1 783 925,632
2682
1 130 352,172
104
3 655 553,922
3 348
Źródło; URE
Promoting renewables...
Quantity of energy generated and number of CO
validated in 2005-2006
Energy quantity
[MWh]
Number of CO
validated
2005
3 208 610,800
4 536
2006
3 884 211,853
4 659
7 092 822,653
9 195
Year
Total
Promoting renewables.....
Importance of the GCO mechanism and
its role in defining surrogate energy
prices
 Renewables are imposed by the Energy
Law (EL) at present
 Pr = Pru x (Eo - Eu)
Pr - surrogate price in PLN
Pru- unit surrogate price established at
240 PLN/1 MWh (2007: 242,40 PLN/MWh)
Eo - quantity of electric energy in MWh imposed by the
EL to be generated with renewables, certified by
GCO and to be eradicated
Eu quantity of electric energy in MWh in terms of GCO and
really eradicated in the given year
More stringent requirements concerning the
number of GCO from 2007 on and its share on
electricity market
Promoting co-generation…
Mechanism of Red certificates of originRCO – a chance to develop co-generation in
Poland?
Certyficate
Heat and of origin (RCO)
power
generation
Electric
energy
Subject to
be traded
RCO property
market
Electricity market
Market
segment
Promoting co-generation…
Co-generation to be promoted on the so called
“competitive market” (70 % of electricity
generated)-30 % long-term contracts
 Definition of co-generation (art. 3 of the
EL)>”Generation in parallel of heat and
electric power and/or mechanical energy during
the same technological process”
 The role of Energy Regulation Office (ERO)
 New definitions introduced to the EL like:
 Co-generation unit
 Reference energy efficiency for separate H and EP
 Electric energy from co-generation etc.
Promoting co-generation…
Co-generation on energy market>new RCO
obligations and market share from 2007 on
Promoting co-generation…
Importance of the RCO mechanism and
its role in defining surrogate energy
prices according to the EL
 CHP obligation-since 1.07.2007 r.
Pc= Pcu1 x Eo1 + Pcu2 x Eo2
Pc- surrogate price of energy in PLN (242 PLN in 2007)
Pcu1- unit surrogate price at least 15% (17 PLN) and not
more than 110% (129) of average price of electric
energy sold on the competitive market in PLN/MWh
Pcu2 -unit surrogate price at least 15% and not more
than 40 % (47 PLN) of average price of electric
energy sold on the competitive market in PLN/MWh
Eo1/Eo2-difference in RCO obligation and number of RCO
validated
Promoting renewables and co-generation
Surrogate price (Pc) of CHP and its impact on the
price of property rights of CO and electricity price
(PLN/MWh)
Position
2006
2007
Basic price
117,49
Pcu1 max (110%)
129,24
Pcu1 min (15%)
17,62
Pcu1 (97,4%)
Pcu2 max ( 40%)
47,00
Pcu2 min (15%)
17,62
Pcu2 (15%)
Pc
240,00
2008
119,70
117,0
117,0
17,96
17,96
242,40
Slajd: 25
Promoting co-generation……
Fines for not meeting the RCO target and their
effects on enterprises behaviour???
and their effec
 CHP obligation–since 01.07.07
 Fine formula
FS = 1,3 x (Pc – Pcr)
FS minimal fine in PLN
Pc surrogate price of energy in PLN
Pcr
price of energy really paid
Promoting renewables......
Stock Exchange Index of CO– OZEX
[PLN/MWh]
250,00
241,09 PLN/MWh
spresent day
Indeks Rynku Praw Majątkow cyh OZEX
240,00
230,00
220,00
09-09-2006
28-01-2006
210,00
200,00
190,00
180,00
170,00
sesja 52
sesja 49
sesja 46
sesja 43
sesja 40
sesja 37
sesja 34
sesja 31
sesja 28
sesja 25
sesja 22
sesja 19
sesja 16
sesja 13
sesja 10
sesja 7
sesja 4
sesja 1
160,00
Źródło: Onichimowski G..: Doświadczenia z handlu prawami majątkowymi wynikającymi ze świadectw
pochodzenia energii z OZE. Komitet Rynek PKEE. Warszawa, 9 stycznia 2007 r.
Problems to solve/questions
• What PM and N ceilings?>NECD pressure
• What finally GHG emissions allocation with
EU ETS>more political pressure
• NAP I – for CO2 2005-2007 Directive
2003/87/EC<208 Mt/y>NAP II-240 Mt???
• PEP 2025 vs EU Energy Policy: 6 % of coal
only
• New energy policy>”green certificates” (7,5%
netto in 2010) and “red certificates” (how
much in reality???)-their effects
• 96 remedy programmes needed urgently for 20
% of territory by end of 2007
• Alternative fuels: huge potential in biomass
1ha~12t of coal or 1100 l of biodiesel
Thank you for your attention
Spasibo za vnimaniye
[email protected]
www.stop-cafe.eu
I would like to thank to
Messr. Marek Kulesa-TOE and Władysław
Tyszko-Interenergia for their substantive
contributions to my presentation